HC Deb 20 February 1996 vol 272 cc163-4
7. Mr. Dunn

To ask the Secretary of State for Social Security how many retired persons were in receipt of occupational private pensions in (a) 1979 and (b) 1995. [14357]

Mr. Heald

In 1979, 43 per cent. of pensioners were in receipt of an occupational pension. By 1993, the figure had increased to 62 per cent.

Mr. Dunn

While I welcome the significant increase in the number of those who enjoy occupational pensions, does my hon. Friend agree that those who receive occupational pensions and those who hope to enjoy them in future will be frightened out of their wits by the prospect of their pension funds—some £600 billion—being run for and by Government with the aid of the trade unions, which is Labour party policy?

Mr. Heald

If a Government forced individuals into a state second-tier scheme which had a stakeholder corporation involving the trade unions, they would kill the private sector that produces a rate of return far higher than that of state schemes. The contributions would have to be higher, as they are in Singapore and Australia. In Singapore, the contributions are double those in Britain and in Australia they are 12 per cent. In fact, it would be more take than stake.

Mr. Denham

To return to the real world, does the Minister recall the £1 million Government advertising campaign in 1988 that encouraged people to leave occupational pensions and the state earnings-related pension scheme? Will he admit that more than 1 million people who left their employers' schemes are now having to have their pensions reviewed at enormous cost? Does he admit that more than 3 million low earners left the state earnings-related pension scheme for personal pensions and that many of them will be worse off as a result? Will he admit that the difference between his side and ours is not about the benefit of funded pensions, but that the Conservatives waste people's hard earned savings and Labour will not?

Mr. Heald

One needs only to listen to the hon. Gentleman to realise that he prefers the state to the private sector. I certainly have no regrets that large numbers of people now have personal pensions that will help them in retirement. That will mean more security for them than they had before.

Mr. Spring

Can my hon. Friend tell me how much money is tied up and invested in the United Kingdom funded private pensions? Can he confirm that the significant total is greater than for all the other European Union countries put together?

Mr. Heald

Yes. The European Community countries other than the United Kingdom have £480 billion invested between them. This country has £600 billion.